India’s Reserve Bank of India (RBI) and Singapore’s Monetary Authority of Singapore (MAS) today announced the launch of a project to link their respective payments systems, Unified Payments Interface (UPI) and PayNow.
Following this, Users will be able to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system, RBI said in a release. The linkage of both payments systems is targeted to be operational by July 2022.
The central bank believes that this linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper, and more transparent cross-border payments.
The central bank further added that the linkage builds upon the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to enable cross-border interoperability of payments using cards and QR codes, between India and Singapore.
The announcement is also a part of RBI’s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.
UPI, which was developed by NPCI, is a mobile-based fast payment system that allows users to make round-the-clock payments instantly using a Virtual Payment Address (VPA) created by the bank account holder. The main purpose of UPI is to eliminate the risk of sharing bank account details by the emitter.
Whereas PayNow also enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just the mobile number, Singapore NRIC/FIN, or VPA.
Earlier in July this year, NPCI’s International payments arm had partnered with the Royal Monetary Authority (RMA) of Bhutan to enable and implement BHIM UPI QR-based payments in Bhutan. Since then, NPCI has been partnering aggressively with companies to expand UPI payment systems in other countries.
Earlier this week, NPCI, through its international payments arm, had partnered with Singapore’s Liquid Group to enable UPI QR-based payments acceptance in 10 North and Southeast Asian markets.